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Lupia v. Medicredit, Inc.

No. 20-1294.  D.Colo. Judge Tymkovich. Fair Debt Collection Practices Act—Summary Judgment—Standing—Bona Fide Error Defense.

August 16, 2021

Plaintiff’s healthcare insurer paid a portion of her hospital medical bill, and the hospital billed her for the remaining balance. Plaintiff refused to pay, and the hospital retained defendant, a debt-collection agency, to collect the debt. Defendant sent a letter to plaintiff requesting payment that was followed by a phone call and voicemail. Plaintiff then sent a letter on May 2 disputing the debt based on the hospital’s acceptance of the initial payment and demanding that defendant immediately cease all telephone calls. Defendant received the letter on May 7. Nevertheless, defendant called plaintiff on May 8 and left a voicemail about the debt. Defendant processed plaintiff’s letter and input the information to her account on May 10.

Plaintiff filed suit under the Fair Debt Collection Practices Act (FDCPA) alleging that defendant violated (1) 15 USC § 1692(g)(b) by attempting to collect the debt despite receiving notice disputing the debt, and (2) 15 USC § 1692c(c) by continuing to call her despite receiving the cease and desist letter. The parties each moved for summary judgment, and the district court granted plaintiff’s motion. The district court denied defendant’s motion for reconsideration of its bona fide error defense.

Defendant argued on appeal that plaintiff lacked standing. However, plaintiff alleged the necessary components for a common-law intrusion-upon-seclusion tort, a concrete harm, so she had standing.

On the merits, defendant argued that the district court erred in entering summary judgment on defendant’s bona fide error defense. To prevail on this affirmative defense, defendant was required to show that the violation (1) was not intentional, (2) resulted from a bona fide error, and (3) occurred despite the maintenance of procedures reasonably adapted to avoid any such error. Here, the district court properly determined that no reasonable jury could find defendant’s general policy allowing three business days to process mail and input cease and desist letters into its system could be reasonably designed to prevent unauthorized contact with the debtor. Further, after denying it had any mail processing policies in discovery, defendant waited until summary judgment to assert that one existed, without explaining the earlier denial. Therefore, the district court did not err.

Defendant also argued that the district court erred in denying its motion for reconsideration. However, the district court acted within its discretion in denying the motion.

The summary judgment was affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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